A Put Option on a Stock Is Said to Be

question 105

Multiple Choice

A put option on a stock is said to be in the money if

• A) the exercise price is higher than the stock price.
• B) the exercise price is less than the stock price.
• C) the exercise price is equal to the stock price.
• D) the price of the put is higher than the price of the call.
• E) the price of the call is higher than the price of the put.

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Definitions:

Equity Recognition

The process in accounting of recognizing increases in ownership interests.

Share Capital

The funds raised by a company through the issuance of shares, representing the ownership interest invested by shareholders.

Acquisition

The process by which a company purchases most or all of another firm's shares or assets to gain control or ownership of that company.

Investment Account

An account held at a financial institution that is used for the purpose of investing in securities such as stocks, bonds, mutual funds, and other investment vehicles.